Budget expectations lift Sensex by 17 points

Expectations that a pleasing Union Budget for 2003-04 will be forthcoming tomorrow prompted an upbeat sentiment in the market today, lifting indices and spurring on buying activity in bank, tech and heavyweight stocks.

The market, perhaps, took cue from the benevolent Railway Budget that was announced yesterday, which relaxed freight rates on a variety of commodities, vindicating the Old Economy. Banks, meanwhile, expect a slew of incentives from the budget including the raising of foreign investment limits in both the private sector and the public sector of the segment. Techs rose on bottom fishing after a recent fall.

However, volatility was conspicuous as well, as it was over the last few sessions. Eventually, the 30-share Sensitive Index (Sensex) gained 16.86 points to 3,277.34. Alternative index, the NSE S & P CNX Nifty Index, rose 3.30 points to 1,052.95.

But it was not all hunky dory for the market today. Sentiment found obstacles in the possiblity of war breaking out in West Asia and the expiry on February futures contracts in the derivatives market.

The Economic Survey unveiled today, meanwhile, presented a mixed picture of the country's economy, but indicated signs of improvement in the coming year.

Pharma MNC GlaxoSmithKline (up 4.86% to Rs 314.95) jumped up on institutional buying interest.

Largest media listing Zee Telefilms (up 2.78% to Rs 83.25) advanced on bargain hunting .

Tech pivotals HCL Tech (up 1.48% to Rs 164.45) and Infosys Tech (up 0.56% to Rs 4,110.15) managed modest gains on bargain hunting .

Largest commercial bank State Bank of India (up 1.08% to Rs 302.90) recovered from an intra-day low of Rs 297.10, as buying interest resumed on the counter after a recent correction. There were rumours that the government has decided to accede to the bank's request to exclude Global Depository Receipt (GDR) holding of 7.65% from the ceiling for foreign institutional investors (FIIs) of 20%. Over 17.30 lakh SBI shares were traded on BSE today.

Other heavyweights Reliance Industries (up 1.18% to Rs 295.50), ITC (up 0.62% to Rs 642.25) and Hindustan Lever (up 0.56% to Rs 170.25) contributed to the gains of the Sensex.

Tata group flagship and largest private sector steel maker Tata Steel (up 0.91% to Rs 149.05) edged up after Railway minister Nitish Kumar cut freight rates on transport of steel. A part of the buying on the Tisco counter was attributed to the imminent hike in domestic prices of steel following the hardening of global steel prices.

Metro-based telecom service provider MTNL (down 3.70% to Rs 100.30) dropped as selling pressure gathered momentum on the counter.

Pharma pivotals Ranbaxy Labs (down 1.20% to Rs 616.65), Dr Reddy's Labs (down 1.18% to Rs 857.25) and Cipla (down 1.06% to Rs 766.80) slipped on selling pressure.

Cement pivotals ACC (down 0.65% to Rs 152.50), L & T (down 0.18% to Rs 199.35) and Gujarat Ambuja Cements (down 0.58% to Rs 161.85) fell despite opening steady.

Software company Hughes Soft (up 10.72% to Rs 168.30) soared after the company announced that it is acquiring Lucent Technologies' software operations for GSM (a technology used to run cellular phone networks) in Germany and India. The acquisition involves all employees of Lucent working in the GSM area moving to Hughes as part of a total outsourcing deal. The deal will result in revenues of $ 30 million over a period of three years of HSS. Over 22 lakh HSS shares were traded on BSE.

i-flex solutions (up 6.54% to Rs 857.50) spurted after the company announced that First Banking Corporation of Zimbabwe has selected Flexcube to upgrade its existing IT infrastructure and centralise its operations. The order has been won after a highly competitive bid and evaluation process.

Ramco Systems (Rs 535.55) was frozen at the 10% upper limit of the circuit breaker after the company announced the launch of Ramco Enterprise Custom Solutions. The services include "Business Transformation" solutions - a range of application development and integration capabilities, as well as "Collaborative Development Centers" - next-generation development outsourcing using web.

Big bank Punjab National Bank (up 9.18% to Rs 87.40) surged on renewed buying interest after a recent fall from the higher levels. Over 17.12 lakh PNB shares were traded on BSE today.

Other private sector banks Bank of Baroda (up 7.36% to Rs 81), Union Bank (up 4.61% to Rs 24.95), Oriental Bank of Commerce (up 4.54% to Rs 58.70), Andhra Bank (up 4.63% to Rs 29.40), Canara Bank (up 3.71% to Rs 65.70), Dena Bank (up 4.18% to Rs 13.70), Bank of India (up 2.08% to Rs 36.75) and Corporation Bank (up 2.01% to Rs 141.85) made modest-to-strong gains.

There were reports last week that the government may raise the cap for FIIs in state-run banks to 49% from the current 20%. The announcement to this effect is likely to be made in the Union Budget.

Pharma MNC Pfizer (down 2.59% to Rs 342.70) eased after the company announced Q4, FY 2002 results on Wednesday. For the year ended 30 November 2002, the company posted a net profit of Rs 75.94 crore (Rs 47.49 crore) on total income of Rs 602.50 crore (Rs 359.14 crore). For the quarter ended 30 November 2002, the company posted a net profit of Rs 33.78 crore (Rs 11.39 crore) on total income of Rs 133.19 crore (Rs 100.45 crore). The company has recommended a 75% dividend for FY 2002. This includes a one time special dividend of Rs 2.50 per share (25%) consequent to exceptional income received relating to termination of Trademark License of Dumex & Protinex.

Alfa Laval (up 4.72% to Rs 266) leaped up after the company recommended a final dividend of 100% on equity shares. Along with an interim dividend of 90% paid in December 2002, the total dividend for the year works out to 190%.

Source: www.capitalmarket.com